Argentina: Tierra del Fuego Energy Transition Support Program

approved

The Province of Tierra del Fuego (“the Province”) is an insular territory located in the south of the country. The provincial network is isolated from the national electricity grid SADI ("Sistema Argentino de Interconexión”) and made up of city grids (Rio Grande and Ushuaia), which results in a fragile network requiring specific consideration for green transition. The current energy mix of the Province is made up of 100 percent fossil fuel, specifically natural gas, which is scarce and costly. The current stock of electricity generators in the province is generally obsolete and inefficient and has urgent needs for maintenance and rehabilitation. The Province of Tierra del Fuego has rich wind resources and therefore great potential for wind generation. However, to date, no wind energy project has materialized. Given the disconnected status of local grids, wind farms need to be built together with modernized and more flexible thermal plants, so that both thermal and renewable generations can be duly integrated. By implementing such a plan, the Province can diversify its energy supply mix, improve energy efficiency, reduce gas consumption and achieve its goal of clean energy transition. Partnering with CAF who will support the modernization of the two thermal power plants, AIIB will support the construction of a wind farm located in Río Grande. The AIIB loan is expected to finance: (1) the procurement, transportation and installation of eight wind power turbines, with an individual capacity of 4.2 MW for each turbine and a total installed capacity of 33.6MW; (2) the interconnection line to the 33Kv local electric power distribution system (including fiber-optic cable network); (3) project feasibility studies.